Rivals to Connaught are waiting to pounce on any unhappy customers of the stricken social housing group, which has issued a spate of profit warnings in recent weeks and is in talks with its creditors.

Mears and Rok, which both reported results today, are keeping a close eye on Connaught's situation. Bob Holt, chairman of Mears, said: "We have had conversations with some of their customers who may be worried about security of supply."

Building maintenance business Rok said it was also talking to some of Connaught's clients, even though it revealed today that first-half profits plunged by 50% following the discovery of financial reporting problems, which forced the suspension of the company's finance director last week.

Mears would be interested in picking up any of Connaught's social housing clients who decide to change suppliers in the short term, but would also be prepared to wait if Connaught's financial problems get worse. But Holt said he would not be prepared to quote less than the going rate for the contracts.

Mears has been caught up in the uncertainty caused by Connaught's problems, which the firm initially blamed on the government's proposed public sector cutbacks. However, Holt said Connaught's problems were company specific, and Mears was seeing opportunities despite the proposed austerity measures. "We have always maintained we had different accounting practices to [Connaught]. We are market leader in social housing where the significant majority of our revenues are non-discretionary spend for services that our clients have a legal obligation to provide."

The company reported a half-year profit of £13.2m, up 42%, while its order book climbed to £2.6bn compared with £1.8bn at the end of 2009.

As well as social housing, Mears provides domiciliary care services. This has been boosted by the recent acquisition of Supporta, helping push up revenues in the division by 64%.

Rok said interim profits had halved to £3m, from £6m a year ago. It blamed the problems in its plumbing, heating and electrical (PHE) business, where it incurred restructuring costs of £6.8m.

"The problems within PHE have been a regrettable chapter in Rok's history," said chairman Stephen Pettit.

"Immediate and appropriate action was taken relating to the shortcomings in financial and operational control in this part of our maintenance and improvements operations," he said.

The company has also slashed its interim dividend by a third to 0.5p per share, from 0.75p last year.

Rok shocked the City last Wednesday when it admitted there had been a serious breakdown in financial controls at its PHE arm. Finance director Ashley Martin was suspended with immediate effect. Rok has not disclosed the exact details of the problems at PHE, but it appears that different parts of the division, which had been acquired in recent years, have been working to different accounting practices. This led to the revenue from some contracts being booked at excessively high levels, while costs were only recognised much later.

The PHE business is not expected to make any contribution to full-year profits this year. The company also warned that it may have to make redundancies at PHE, but a spokeswoman said it was too early to give more details.

It said it remained cautiously optimistic about its future prospects, despite the threat of government cutbacks that could hit its social housing arm, and expects to maintain profit margins at last year's levels through 2010.

Analysts at Numis said Rok's management must prove that they have got to grips with the problems.

"The onus on recovery is management-driven, and outweighs macro concerns about the UK construction outlook, and it is for management to provide the actions that are essential for this value to emerge," said Numis in a research note.

Connaught shares continued to slump, down 5% to 14.94p. Mears added 10p to 259.75p while Rok recovered another 1.25p to 20.5p.